Bigger volumes on hand for Wonderful Citrus domestic season

With the exception of lemons, the volume of the California citrus crop is up this season, said Zak Laffite, president of Wonderful Citrus.

The short-term harvest delays from substantial rain in California in late December and January are countered by long-term drought relief gains, he said.

And despite an uneven transition between imported mandarins and California supply in November because of some off-quality imports from other marketers, Laffite said Wonderful Citrus is in a good position with its Halo deal and the marketer’s overall citrus program this year.

While California lemons may be off compared with last season, the supply of “sweet” citrus such as oranges and tangerines is up in 2022-23, he said.

A longer-duration season in 2020-21 may have contributed to a lighter crop in 2021-22, he said. Volume is back to more normal levels this season, he said. 

Southern Hemisphere fade

The November transition between Southern Hemisphere fruit and the U.S. halo season was somewhat disappointing, Laffite said.

While the industry expected Southern Hemisphere citrus to wrap up early because of the freeze in Chile, uneven quality fruit from the Southern Hemisphere persisted longer than anticipated in the market. That contributed to a later start for California mandarins, he said. 

“We expected to get an early start and actually sort of boost consumption, but it was a little less than we expected,” Laffite said. Even so, California citrus crops were selling well as of mid-January, he said.

And because the 2022-23 crop is not especially heavy, Laffite said there is no worry about the sluggish beginning.

“We feel very good,” he said.

Welcome rain

The heavy rains in California in late December and January were much needed, Laffite said. 

“We thought [we had] a wet December last year, but we never saw another drop of rain [for] the remainder of the year,” he said. 

Through Jan. 10 this season, California’s precipitation levels were running 130% to 160% above average, but most major reservoirs were well below their historical capacity.

“We will take the trade-off [between rain and harvest delays],” Laffite said, adding that Wonderful Citrus has done a good job of managing its supply through the harvest interruptions.

“We're seeing less disruptions in our supply and our fulfillment rates compared with our competitors,” he said.

Wonderful Citrus offers all major varieties within the citrus category, including clementines and mandarins in the Halos brand, lemons, oranges, grapefruit and limes.

“I think what makes us different is that we're growers for each of those,” Laffite said.

Wonderful Citrus grows oranges, Halos and lemons in California, oranges and grapefruit in Texas, and lemons and limes in Mexico.

As a whole, Wonderful Citrus owns and manages over 72,000 acres of fresh citrus, according to the company, including Wonderful Halos and Wonderful Seedless Lemons, as well as navel and valencia oranges; lemons; limes; grapefruits; and other citrus varieties.

Wonderful Citrus has also sourced counter-seasonal Halos in the summer season since 2017. Wonderful Citrus pulls from fruit from six different countries in the Southern Hemisphere.

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“We basically have taken the same quality standards and expectations consumers have [for California Halos] and have applied it into the summer window and done so uncompromisingly,” Laffite said.

The marketer has both in-country and U.S. quality assurance and quality control for its imports from South Africa, Chile, Peru, Australia, Uruguay and Argentina.

Organic fruit is not yet a strength of Wonderful Citrus, but Laffite said organic volume will be growing in upcoming seasons. In particular, limes in Mexico and Halos in California will see increasing organic volume in the years ahead, he said.

The goal of the marketer is to have the same proportion of organic citrus as the overall citrus category does, which is now close to 3% or so of total sales, Laffite said.

Retail grocery inflation of 7% to 8% or higher has caused some adjustments in the way consumers shop, Laffite said. That could be reflected in fewer visits to the store and reduced average purchase per visit.

Halos as a brand, he said, isn’t necessarily trending any differently than the entire citrus category.

“We don't feel like we're being disproportionately affected,” he said. “Our sales are up versus the same time last year, and we feel good about that.”

Promotion promise

Consumers are looking for promotions, Laffite said, and Wonderful Citrus is working with retailers to give stores tools, such as paper and digital coupons, to draw attention to Halos and other citrus.

“We continue to invest in brand awareness,” he said.

The marketer transitioned away from TV ads a couple of years ago to increase its investment in social media channels.

“We understand our consumers, and who our consumers are, much better today than we did before,” he said. The company has created fun videos for social media platforms such TikTok, Instagram and YouTube to promote Halo brand awareness.

Wonderful Citrus uses a geo-targeted approach to promotion, Laffite said, and the marketer invests heavily in markets where Halos have good distribution and not as heavily in markets where Halos are more difficult to find.

The geo-targeted approach helps push consumers to try Halos for the first time or buy a little more if they are already consumers.

Online sales

Laffite said e-commerce grew exponentially during the COVID-19 pandemic and has stayed in the mainstream because of the convenience factor.

With e-commerce sales, the impulse shopping factor is diminished. 

“I think you can argue that 60% or 70% of shoppers have fruit on their on their shopping list, but they haven't written down [a specific] fruit,” he said. “They are going to make their selection once they walk into the store and [see] what looks good and what's on promotion.”

In response to that issue, Wonderful Citrus promotes with banner ads and other tools on e-commerce platforms. Laffite noted that Wonderful’s pistachios and Fiji water have a much more mature presence in e-commerce. Learnings from those products help inform the Wonderful Citrus approach to promoting its fresh citrus on digital platforms.

Wonderful Seedless Lemons will see growing volume, Laffite said.

“We've been very meticulous and methodical about how we build this program, making sure that we can deliver 52 weeks [a year],” he said. 

Wonderful Seedless Lemons are currently planted in California and Mexico, with volume growing last year by 400%.

Another big increase in Wonderful Seedless Lemons is anticipated in the 2022-23 season, he said. Demand has kept pace with supply, and Wonderful Citrus continues to expand distribution with retailers who already carry the fruit and with retailers just starting with the program.

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Some retailers use Wonderful Seedless Lemons as a mainstream lemon offering besides organic lemons, and other retailers market Wonderful Seedless Lemons alongside conventional standard lemons, which also is a successful strategy, he said.

Secondary displays in the produce, beverage or alcoholic departments throughout the grocery store are also important, he said.

“We’re really trying to heighten the benefits of seedless lemons,” he said, noting that messaging to consumers includes references to the time saved dealing with seeds compared with conventional lemons.

Laffite said that message scores with heavy beverage users of lemons.

For the foodservice sector, Wonderful Seedless Lemons are targeted to heavy users that value its seedless trait.
 
Foodservice and exports are segments of the market that are getting increased marketing investment, he said.

“We've made inroads primarily with some of the major [foodservice] distributors,” he said, noting further efforts by Wonderful to target chefs.

Wonderful Citrus is also one of the biggest suppliers of conventional lemons, he said.

With the bigger Western U.S. crop, Laffite said export prospects should move higher for 2022-23 compared with the previous season. On the other hand, the strong U.S. dollar could hold back export potential, he said.

The peak citrus export window is February through April, he said, with Asian markets such as South Korea, Japan, China and Australia expected as significant customers.

Packaging changes will continue to be driven by the aim to be more sustainable, and Laffite said there is room to grow in that respect.

“I think as an industry, we have yet to find a way to make that enormous step-change from a packaging perspective, and we continue to engage with our suppliers to make sure that's a priority of theirs.”